Annual Report
2009-2010
ON THE ENVIRONMENT
T 613-992-7189 / F 613-992-7385 / E-mail: admin@nrtee-trnee.ca
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TABLE OF CONTENTS
1.0 / THE YEAR IN REVIEW ......................................................................................... 09 2.0 / A LOOK AHEAD ................................................................................................. 21 3.0 / MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS ..................................... 25 4.0 / AUDITORS REPORT ............................................................................................ 27 5.0 / STATEMENT OF FINANCIAL POSITION ..................................................................... 29 6.0 / STATEMENT OF OPERATIONS ................................................................................. 31 7.0 / STATEMENT OF EQUITY OF CANADA ....................................................................... 33 8.0 / STATEMENT OF CASH FLOW .................................................................................. 35 9.0 / NOTES TO THE FINANCIAL STATEMENTS .................................................................. 37
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1.0
/ THE YEAR IN REVIEW
We released several reports and one brochure related to our work in 20092010. We also held 25 consultation meetings across the country on various issues. These consultation sessions were held in order to ensure stakeholder engagement in various phases of our initiatives (program scoping, sharing of information, review of results and discussion of recommendations).
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sessions in six Canadian cities Vancouver, Calgary, Ottawa, Toronto, Montreal, and Halifax during the spring and summer of 2009, to gauge regional views and gain insights on the potential impact of the proposed carbon pricing policy. A summary report, released in December 2009, highlights the key outcomes from the sessions, including areas of agreement and divergence as well as specic issues participants felt the federal government needed to be aware of when moving toward a unied national cap-and-trade system. Participants across Canada strongly supported the recommendations of Achieving 2050, in particular: An economy-wide carbon pricing policy with the greatest breadth of coverage possible; Achieving 2050s cap-and-trade implementation road map, which was seen as a logical, sequenced approach to implementing an adaptive policy that minimizes risks; Taking action now, rather than delaying; A move from the current fragmentation of carbon prices and policies across Canada to a unied, national approach; The reports recommendation to send a carbon price signal that is certain and credible now, while being able to adapt to changing circumstances over time; A cap-and-trade system that can eventually link with a U.S. system; The use of auction revenue rst and foremost for technology deployment and innovation; and The reports recommendations concerning new governance institutions. As well, participants from all sessions wanted the federal government to be aware of some issues of concern: Implementing a cap-and-trade system could put Canadian rms at a competitive disadvantage with U.S. rms, from proposed U.S. protectionist measures in draft climate legislation, carbon leakage, and greater auction of permits in Canada than in the U.S. The energy system could lack the necessary capacity to meet the demands of electrication as a result of carbon pricing. Copies of the Achieving 2050 advisory report, technical backgrounder, and outreach report, can be found at: http://www.nrtee-trnee.ca/eng/publications/carbon-pricing/carbon-pricing-eng.php
Achieving 2050: A Carbon Pricing Policy for Canada - Outreach Report was released in December 2009.
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CLIMATE PROSPERITY THE ECONOMIC RISKS AND OPPORTUNITIES OF CLIMATE CHANGE FOR CANADA
Building on its previous work on climate change, the NRTEE launched its Climate Prosperity program in 2009-2010, focusing on the economic risks and opportunities for Canada related to climate change. A brochure providing details of the program was produced and distributed to a large number of stakeholders. Climate Prosperity will develop strategic policy recommendations for governments to secure Canadas economic future in a changing climate over the course of seven distinct reports. It will offer new insights and ideas on how Canada can not only cope with climate change, but prosper through it. In 2009-2010, efforts were focused on program scoping, initial research, and stakeholder consultation, resulting in an integrated, comprehensive program approach based on two main policy research streams. The rst stream deals with the physical impacts of climate change. Climate change will bring risks to the economy, for example, from a rise in sea levels and from extreme events such as storms and oods. There will also be some economic benets for Canada from climate change, at least in the short-term, such as reduced heating bills as winters become less cold. Currently, there is insufcient knowledge about what the physical impacts of a changing climate will mean for Canadas economy and regions, and the costs of adaptation. The second research stream addresses the risks and opportunities that are created by a global transition to a low-carbon economy. As the world enacts policies to reduce emissions, new industries and technologies will emerge. This stream of work will explore how Canada can seize these opportunities and enhance its competitiveness. Work has been undertaken on both streams. The NRTEE has launched an ambitious research agenda involving original economic modelling and analysis, as well as extensive consultations with key environmental, industry and expert stakeholders. Signicant progress has been made in understanding the impacts of climate change for Canada under various scenarios of warming, the economic implications of climate change on four specic sectors (coastal zones, human health, public infrastructure and forests), the implications of uncertain U.S. climate policy for Canadian climate policy choices, and Canadas standing in low-carbon competitiveness compared to other G8 countries. Knowing where we stand is a key component in determining where we must focus if Canada is to compete and win in this new reality. This is the purpose of the rst report entitled Measuring Up: Benchmarking Canadas Competitiveness in a Low-Carbon World, released in May 2010. It assesses Canadas competitiveness against other G8 nations in areas such as
Climate Prosperity: The Economic Risks and Opportunities of Climate Change for Canada was released in April 2010.
Measuring Up: Benchmarking Canadas Competitiveness in a Low-Carbon World was released in May 2010.
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emissions and energy, skills, investment, innovation and governance. Copies of the report and the brochure, as well as more information on the Climate Prosperity program can be found at: http://www.nrtee-trnee.ca/ eng/issues/programs/climate-prosperity/climate-prosperity-eng.php
True North: Adapting Infrastructure to Climate Change in Northern Canada was released in November 2009.
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CHANGING CURRENTS: WATER SUSTAINABILITY AND THE FUTURE OF CANADAS NATURAL RESOURCE SECTORS
The NRTEE program on Water Sustainability and Canadas Natural Resource Sectors is designed to examine the relationship between the energy, mining, forestry and agriculture sectors and water sustainability. The program raises the prole of water management within Canada, particularly with respect to the natural resource sectors. Its goal is to provide recommendations to governments, industry and water management authorities on policies, approaches and mechanisms through which water can be better managed to foster both ecosystem health and the natural resource sectors economic sustainability. In 2009-2010, the NRTEE completed the programs rst phase, which focused on dening the most important water uses to the sectors and key issues relative to them. The programs sub-committee, comprised of members of the NRTEE, played a strategic guidance role for the program and was deeply involved throughout Phase I. This group is complemented by an Expert Advisory Committee (EAC), made up of leading Canadian water experts. The NRTEEs research was also supplemented by a number of roundtable meetings held in conjunction with industry associations. These meetings helped to verify the in-house ndings of the NRTEE and enhanced the understanding of the key issues from the perspective of the industry stakeholders. This work resulted in the publication of Changing Currents: Water Sustainability and the Future of Canadas Natural Resource Sectors, released in June 2010, in conjunction with the inaugural Canadian Water Summit in Mississauga, Ontario. Information on Water Sustainability and Canadas Natural Resource Sectors can be found at: http://www.nrtee-trnee.com/eng/issues/programs/water/ water.php
Changing Currents: Water Sustainability and the Future of Canadas Natural Resource Sectors was released in June 2010.
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processes if we are to truly make progress. Thats why the NRTEE and the Public Policy Forum collaborated in 2009-2010 to examine how we could reinvigorate our governance processes to make real progress on sustainable development. Over the course of two round table discussions and one-on-one interviews with 20 of Canadas leading experts and practitioners in the eld of sustainable development and governance, the NRTEE developed the content towards production of a report entitled Progress Through Process: Achieving Sustainable Development Together. The report set out eight key Elements of Successful Collaborative Governance for Sustainable Development: 1. 2. 3. 4. 5. 6. 7. 8. Focus on Clear Outcomes Find the Right Convenor Bring the Right People Together Ensure Real Commitment Create Clear Rules and Scope Foster Shared Ownership and Accountability Build Legitimacy Establish Ongoing Dialogue
Progress Through Process: Achieving Sustainable Development Together was released in February 2010.
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The NRTEE undertook the required analysis to comply with our obligations under KPIA and our ndings were provided in a report to the Minister of the Environment in July 2009. The NRTEE offered the following conclusions in its report: Emissions reductions attributed in the Plan to specic policies and programs are likely overestimated due to methodological issues. This is most apparent for the accounting of emissions reductions for the Technology Fund and the Climate Change Trust Fund, as well as the persistence of free-ridership, rebound, and additionality issues in some of the individual measures. There are deciencies in relying exclusively on the KPIA annual assessment approach with its short-term focus and unclear denition of emissions reductions as the formal accountability mechanism and process for forecasting and tracking emission reductions in Canada. Transparent forecasting and evaluation processes are important for ensuring Canada is on a path to achieving long-term reductions. Comparing forecasts of the impacts of policies to the emissions reductions that eventually result from these policies can allow for improving of both forecasting methods and policy over time. A transparent longer-term (post 2012) process of forecasting and accounting for GHG emissions reductions could address these issues. The 2009 NRTEE KPIA Response also recommended: That for future KPIA Plans, the government forecast estimates of future reductions in terms of projected changes in Environment Canadas GHG Emissions Inventory; That future KPIA Plans reect both emissions forecasts and actual emissions data from the inventory, and further, that consideration be given to developing and implementing an ongoing public presentation of this information beyond the KPIA period; That future KPIA Plans apply consistent methodologies between the integrated modelling and forecasts for specic policies and programs and provide a more detailed and transparent explanation of differences between two sets of forecasts. That the uncertainty analysis provided in the 2009 Plan be deepened by providing additional information on the assumptions behind the various forecasts. Copies of the report can be found at: http://www.nrtee-trnee.ca/eng/publications/KPIA-2009/Index-KPIA-NRTEE-Response-2009-eng.php
The Response of the National Round Table on the Environment and the Economy to its Obligations under the Kyoto Protocol Implementation Act was released in July 2009.
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A new tagline, Think Green; Act Green, created and selected by NRTEE employees, captured the spirit of the initiative.
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The NRTEE Secretariat has committed itself to conduct an annual inventory of GHG emissions from NRTEE operations and to calculate its carbon footprint according to recognized standards and methods. The information generated by the annual GHG inventory highlights opportunities for the NRTEE to reduce or avoid energy use in its operations. From Jan. 1st to Dec. 31st 2009, the NRTEEs carbon footprint totalled 176 metric tonnes CO2e (carbon dioxide equivalents), most of which was generated by business travel. For details on the NRTEE Greening Initiative, please visit: http://www.nrteetrnee.ca/eng/about-us/greening-the-nrtee/greening-the-nrtee-eng.php
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for our reports. The innovations have led to signicant increased website trafc. REPORT DOWNLOAD STATISTICS
REPORTS Achieving 2050: A Carbon Pricing Policy for Canada - Advisory Report Achieving 2050: A Carbon Pricing Policy for Canada - Technical Report Achieving 2050: A Carbon Pricing Policy for Canada - Outreach Report True North: Adapting Infrastructure to Climate Change in Northern Canada Progress Through Process: Achieving Sustainable Development Together NRTEE Response to its obligation under the Kyoto Protocol Implementation Act Measuring Up: Benchmarking Canadas Competitiveness in a Low-Carbon World Changing Currents: Water Sustainability and the Future of Canadas Natural Resource Sectors * FY (Fiscal Year) Finally, the NRTEE also achieved a noteworthy presence in the media during the year. Round Table members made a number of appearances in traditional print and broadcast forums. True North and the rst volume of our Climate Prosperity series both received signicant attention, and our work has begun to appear on the blogs and electronic communications of various stakeholder groups, journalists and others who utilize the social media. The NRTEE also produced thought pieces and explained its research in publications such as The Hill Times and Policy Options magazine.
Downloads to July 13, 2010 28,689 19,926 2,166 27,878 1,050 3,574 7,766 19,665
Downloads for FY* 2009-2010 26,879 18,007 1,507 22,821 561 2,577 Not released in FY 2009-2010 Not released in FY 2009-2010
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2.0
/ A LOOK AHEAD
A LOOK AHEAD
WATER SUSTAINABILITY AND CANADAS NATURAL RESOURCE SECTORS
The Water Sustainability and Canadas Natural Resource Sectors Program has an ambitious set of goals for Phase II, which runs from April 2010 to March 2011. During this period, the NRTEE will conduct research into water governance and management, specically looking at water allocation, policy instruments, data and information management and collaborative governance. The research will be complemented by a number of meetings with stakeholders and experts. This will lead to a second report, to be released in spring/summer 2011, which will provide options, solutions and recommendations for improving water governance in the country.
CLIMATE PROSPERITY THE ECONOMIC RISKS AND OPPORTUNITIES OF CLIMATE CHANGE FOR CANADA
Climate change and Canadas response to it have profound economic implications for our nations future. Ensuring Canada is well-prepared to adapt and prosper in an increasingly carbon constrained global economy is the focus of this comprehensive policy research initiative by the NRTEE, which began in 2009-2010 and which will continue to be a priority of the NRTEE over the next two years. The timeline below illustrates the NRTEE publishing plan in the coming years. CLIMATE PROSPERITY TIMELINE
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In 2010-2011, our analysis of Canada-U.S. climate policy risks and opportunities will be nalized. We are also planning to complete work on both the Physical Impacts of Climate Change in Canada and the Net National Costs of Climate Change. We expect to release those three reports over the course of the year. The NRTEE will also collaborate with the Royal Canadian Geographical Society towards its October 2010 issue of the Canadian Geographic magazine and its French-language companion Gographica - fully dedicated to the NRTEEs Climate Prosperity program. Finally, building on the rst few reports of Climate Prosperity, the NRTEE will initiate, in 2010-2011, the work towards the development of a range of policy pathways and actions to help Canada take advantage of its potential to adapt to a changing climate, as well as those necessary for Canada to thrive in a global low-carbon economy. This work will lead to the release of two policy reports in 2011-2012.
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3.0
/ MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS for the year ended March 31, 2010
Responsibility for the integrity and objectivity of the accompanying nancial statements for the year ended March 31, 2010 and all information contained in this report rests with the NRTEE management. These nancial statements have been prepared by management in accordance with accounting policies issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector, and year-end instructions issued by the Ofce of the Comptroller. Management is responsible for the integrity and objectivity of the information in these nancial statements. Some of the information in the nancial statements is based on managements best estimates and judgment and gives due consideration to materiality. To fulll its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the NRTEEs nancial transactions. Financial information submitted to the Public Accounts of Canada and included in the NRTEEs Departmental Performance Report is consistent with these nancial statements. Management maintains a system of nancial management and internal control designed to provide reasonable assurance that nancial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its nancial statements by careful selection, training and development of qualied staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the NRTEE. The nancial statements of the NRTEE have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.
M McLachlan Jim McLachlan Director, Corporate Services and Chief Financial Ofcer
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4.0
/ AUDITORS REPORT
AUDITORS REPORT
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5.0
/ STATEMENT OF FINANCIAL POSITION
ASSETS Financial Assets Due from Consolidated Revenue Fund Receivables (Note 4) 472,674 17,611 490,285 431,901 58,447 490,348
Non-Financial Assets Prepaid expenses Tangible capital assets (Note 5) 7,222 219,748 226,970 16,415 201,967 218,382
TOTAL ASSETS
717,255
708,730
LIABILITIES AND EQUITY OF CANADA Accounts payable and accrued liabilities (Note 6) Employee future benets (Note 7) 613,070 516,474 1,129,544 589,662 532,206 1,121,868
717,255
708,730
Approved by:
Jim McLachlan McLachlan Director, Corporate Services and Chief Financial Ofcer
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/ STATEMENT OF OPERATIONS
EXPENSES Operating Salaries and employee benets Professional and special services Rentals Travel Publications Communication Furniture and equipment Repairs and maintenance Amortization of tangible capital assets Utilities, materials and supplies 2,998,721 1,095,718 402,312 145,661 115,756 88,179 88,145 83,786 71,993 37,202 5,127,473 Executive Committee Travel and living expenses Honoraria 970 4,529 5,499 Other Committees Travel and living expenses Honoraria 81,115 132,744 213,859 100,751 133,868 234,619 629 4,866 5,495 3,000,872 1,372,643 435,605 165,169 157,956 96,718 81,021 47,255 66,631 35,771 5,459,641
TOTAL EXPENSES
REVENUES Donations (Note 10) Miscellaneous TOTAL REVENUES
5,346,831
5,699,755
34,690 34,690
5,312,141
5,593,870
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/ STATEMENT OF EQUITY OF CANADA
Equity of Canada, beginning of year Net Cost of Operations Services provided without charge (Note 3) Net change in due from Consolidated Revenue Fund Net Cash Provided by Government (Note 9) EQUITY OF CANADA, END OF YEAR
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/ STATEMENT OF CASH FLOW
OPERATING ACTIVITIES Net Cost of Operations Non-cash items included in cost of operations: Less: Amortization of tangible capital assets Services provided without charge Statement of Financial Position adjustments: Decrease in receivables Decrease in prepaid expenses Decrease (increase) in accounts payable and accrued liabilities Decrease (increase) in employee future benets Cash used by operating activities (40,836) (9,193) (23,408) 15,732 4,748,467 (36,439) (16,199) 115,483 (104,475) 5,051,632 (71,993) (433,976) (66,631) (433,976) 5,312,141 5,593,870
CAPITAL INVESTMENT ACTIVITIES Acquisition of tangible capital assets Cash used by capital investment activities 89,774 89,774 109,998 109,998
4,838,240
5,161,630
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9.0
/ NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS for the year ended March 31, 2010
1. AUTHORITY AND OBJECTIVES
The National Round Table on the Environment and the Economy (NRTEE) was established in 1994 under the National Round Table on the Environment and the Economy Act and is a departmental corporation named in Schedule II of the Financial Administration Act. The NRTEE fulls its objective of promoting sustainable development, and the integration of the environment and economy in decision making in all sectors, by conducting studies, organizing stakeholder dialogues on specic issues and economic sectors, providing advice, carrying out educational and communication activities, and by acting as a catalyst for change. Its operating expenses are funded mainly by a budgetary lapsing authority and, to a lesser extent, from cost recovery and cost sharing for specic activities. The NRTEE is not subject to the provisions of the Income Tax Act.
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Parliamentary Appropriations
The NRTEE is nanced mainly by the Government of Canada through Parliamentary appropriations. Appropriations provided to the NRTEE do not parallel nancial reporting according to Canadian generally accepted accounting policies for the public sector, as they are based in a large part on cash ow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 9 provides a high-level reconciliation between the two basis of reporting.
b)
c)
Revenues
Revenues are accounted for in the period in which the underlying transaction or event occurred that give rise to the revenues. Revenues that have been received but not yet earned are presented as deferred revenues. Funds received from external parties for specied purposes are recorded upon receipt as deferred revenues. These revenues are recognized in the period in which the related expenses are incurred.
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d)
Expenses
Expenses are recorded on the accrual basis: Employees severance benets are accrued as earned and are calculated using information derived from the results of the actuarially determined liability for employee severance benets for the Government as a whole. Employee severance benets on cessation of employment represent obligations of the NRTEE that are normally funded through future year appropriations. Vacation pay and compensatory leave are expensed as the benets accrue to employees under their respective terms of employment. Contributions to the Public Service Pension Plan are charged to expenses in the year incurred and represent the total NRTEE obligation to the Plan. Current legislation does not require the NRTEE to make contributions for any actuarial deciencies of the Public Service Pension Plan. Services provided without charge by other government departments are recorded as expenses at their estimated costs. A corresponding amount is credited directly to the Equity of Canada
e)
Receivables
Receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
f)
Contingent Liabilities
In the normal course of its operations, the NRTEE may become involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the nancial statements.
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h)
Measurement Uncertainty
The preparation of these nancial statements in accordance with Treasury Board of Canada Secretariat accounting policies, which are consistent with Canadian generally accepted accounting policies for the public sector and year-end instructions issued by the Ofce of the Comptroller General, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the nancial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most signicant items where estimates are used are the useful life of tangible capital assets and assumptions underlying the employee severance liabilities. Actual results could differ signicantly from those estimates. Managements estimates are reviewed periodically and, as adjustments becomes necessary, they are recorded in the nancial statements in the year they become known.
4. RECEIVABLES
2010 ($) 2009 ( $)
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Acq uisit io ns
Dispo sit io ns
Leasehold Improvements Informatics Equipments and Purchased Software Furniture and Equipment
$44,919 $44,855
$89,774
Accumulat ed Amo rt izat io n Net B o o k Value at March 31, 2010
$621,137
Net B o o k Va l ue a t March 31 , 2009
Leasehold Improvements Informatics Equipments and Purchased Software Furniture and Equipment
Trade Other Government Departments Total Accounts Payable and Accrued Liabilities
040
ii)
Pension Benets
The NRTEEs and employees contribution to the Public Service Pension Plan for the year were as follows:
2010 ($) 2009 ( $)
294,403 173,820
257,023 129,420
8. CONTRACTUAL OBLIGATIONS
The nature of the NRTEE activities can result in some large multi-year contracts and obligation whereby the NRTEE will be obligated to make future payments when the services are rendered. Signicant contractual obligations that can be reasonably established are summarized as follow:
2014 & t hereaf t er
2011
2012
2013
TOTA L
Operating lease
$18,233
$8,351
$964
$27,548
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9. PARLIAMENTARY APPROPRIATIONS
The NRTEE receives the majority of its funding through Parliamentary appropriations, which are based primarily on cash ow requirements. Items recognized in the Statement of Operations and Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior and future years. Accordingly, the NRTEE has different net results of operations for the year on a government funding basis than on an accrual basis of accounting. These differences are reconciled below.
a)
Net cost of operations Adjustments for items affecting net cost of operations but not affecting appropriations: Amortization of tangible capital assets Services provided without charge Other revenues
5,312,141
5,593,870
Changes in accounts affecting net cost of operations but not affecting appropriations: Decrease (increase) in employee future benets 15,732 15,732 (104,475) (104,475)
Adjustments for items not affecting net cost of operations but affecting appropriations: Acquisitions of tangible capital assets Decrease in prepaid expenses 89,774 (9,193) 80,581 109,998 (16,199) 93,799
4,937,174
5,188,471
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b)
Statutory appropriation: Contributions to employee benet plans 407,761 5,450,836 411,000 5,578,183
(513,662) 4,937,174
(389,712) 5,188,471
c)
Net cash provided by government Adjustments for items affecting net cash provided by government but not affecting appropriations: Other revenues
4,838,240
5,161,630
34,690 34,690
105,885 105,885
Adjustments for items not affecting net cash provided by government but affecting appropriations: Variation in receivables Variation in accounts payable and accrued liabilities 40,836 23,408 64,244 36,439 (115,483) (79,044)
4,937,174
5,188,471
10. DONATIONS
No donations were received in 2010 (2009 - $105,000).
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